The Dairy Cliff Approaches!

You might have hoped Congress was done with different cliffs to send us over—sadly this is not the case. Without an agreement on the Farm Bill by the end of the year, Congress and the nation will go over the “dairy cliff” on January 1st.

The federal government heavily subsidizes the production of American dairy products to keep their prices down through various programs including the Milk Income Loss Contract program, which sends milk producers payments when the price of liquid milk falls below a certain rate in Boston. (Yes, milk prices in Boston determine a huge nationwide agricultural subsidy.) The so-called “dairy cliff” involves a different program that mandates the government buy dairy products at a certain price. These prices are determined in each reauthorization of the Farm Bill, but without a new Farm Bill, the prices revert to those in the 1949 Agricultural Act. This expiration would set milk prices at 1949 prices, which happen to be double the current price of milk. Additionally, Secretary of Agriculture, Tom Vilsack has stated he would be legally obligated to enforce the law. If we go over this cliff, there are no legal tricks to avoid a doubling in the price of milk.

While a price increase of any product inherently hurts the poor, going over the “dairy cliff” would be especially devastating to low-income women and children receiving WIC benefits. The Special Supplemental Nutrition Assistance Program for Women, Infants, and Children (WIC) assists low-income pregnant women, new mothers, children and infants. It gives food aid to mothers and their children, but limits their purchases to certain products that are deemed nutritious, including milk and cheese. If the price of milk and cheese doubled it would become prohibitively expensive and the 53% of America’s infants who rely on WIC will not be able to obtain a balanced diet—over half of America’s infants!

Trackbacks/Pingbacks

[…] plans to pass the five-year renewal of the bill by early January to avoid the effects of the “dairy cliff,” which will go into effect on January 1st. While this is good news for agriculture programs, […]